The industrial zone of Abu Dhabi has attracted investments valued at over $15 billion across a variety of sectors since its launch in November 2010
Investments at Khalifa Industrial Zone Abu Dhabi (Kizad) went a notch up last year as it expanded, contributing 3.2 per cent of Abu Dhabi’s non-oil growth and furthering the emirate’s economic diversification plans.
2016 also marked a year of important agreements and partnerships for Kizad, which registered stable growth in leasing activity that resulted in 20 new agreements with local, regional, and international customers, increasing the total number of investors to over 130 to date.
From the 130 investors, 88 investors have leased land through agreements, 21 invested in Kizad’s Logistics Park, and 25 are free zone companies in different sectors. Since its launch in November 2010, the industrial zone has attracted investments valued at over Dh55 billion across a variety of sectors.
New investors in 2016 have each leased an average land size of 70,000 sq m, which brings the total areas leased in 2016 to more than two million sq m, increasing the total size of prime industrial leased areas since inception to 14.5 million sq m.
Capt Mohamed Juma Al Shamisi, CEO of Abu Dhabi Ports attributed the success of the industrial zone to “the new robust partnerships and the ability to stay ahead of the competition by consistently investing in its facilities, technology, and processes. This has enabled us to deliver outstanding performance and enhance our service offering. We have also capitalised on the growth opportunities created through the ongoing expansion of Khalifa Port.”
Mana Al Mulla, CEO of Kizad commented: “We have expanded our client base significantly across a diverse range of sectors and industries, through building long-term relationships with our tenants and catering to their dynamic requirements, demonstrating that our strategy for growth is delivering robust results.”
In 2016, Kizad also achieved significant growth in its Emiratisation drive, which increased from 45 per cent in Jan 2016 to 64 per cent in December 2016.
KHALIFA PORT FTZ
The operator added a new free zone – the new Khalifa Port Free Trade Zone (Khalifa Port FTZ), totalling 100 sq kms, which houses eight logistics and four industrial companies, spanning industries such as aluminium, automotive, pharmaceuticals, food processing, packaging, polymer converting and other industries that rely on Khalifa Port.
The new free zone serves as a next-generation platform for trade, logistics, manufacturing, and consumer goods and offers a flexible master plan that is capable of accommodating more industries in the future from a land use perspective.
The ultra-modern facility also provides unparalleled advantages for businesses including competitive lease prices and some of the lowest utility costs in the world – all under a tax-free umbrella. The free trade zone offers investors 100 per cent foreign ownership, 100 per cent repatriation of capital and profits, competitively priced shipments and efficient customs procedures, among other value-added benefits.
Industries in Kizad continued to expand in 2016 with 20 new agreements, increasing the overall amount of investment since inception to over Dh40 billion ($10.89 billion) to date. This includes the agreement signed with Integral Plastic Industries in November 2016 to build a new manufacturing plant in Kizad with an investment of Dh10 million. The manufacturing facility will be built on a plot of 21,649 sq m with the aim of producing 15,000 tonnes per annum of Plastic Bottles Preform (PET), Plastic Bottles Caps (HDPE), and Plastic Packing Strips Rolls (PET). Production is expected to commence in the first quarter of 2018.
Abu Dhabi Ports also signed a 50-year agreement with Emirates Aluminium Rolling (Emiroll), a joint venture between Dubal Holding, Dubai Investment Industries (a subsidiary of Dubai Investments PJSC) and Madar Aluminum Rolling Singapore (Mars), to set up a manufacturing plant with a total investment of Dh440 million on a 83,554.58 sq m plot in Kizad’s downstream aluminium cluster.
Emirates Global Aluminium (EGA), an existing investor in Kizad, will provide Emiroll with raw molten aluminium to produce aluminium rolled products, further boosting the UAE’s aluminium downstream industries to meet global demand and contribute to Abu Dhabi›s economic diversification plan.
Meanwhile, Adnoc Distribution signed an agreement with Abu Dhabi Ports to strengthen Adnoc Distribution’s capacity to develop new projects at Kizad and provide logistical support to its existing developments. As per the agreement, Adnoc Distribution will set up a lubes and grease plant, as well as strategic storage warehouses to support product distribution operations in different emirates. The company will commence its operations in the new location by the beginning of 2022.
Another deal was signed with Sobha Group, one of the largest real estate developers in India and the Middle East, to launch Safnon Italia, a furniture factory-cum showroom in Kizad. Set to become one of the largest furniture manufacturing units in the GCC region, Sobha’s 172,990-sq m state-of-the art factory will produce a range of products, including upholstered furniture, modular furniture, kitchen, wardrobe and wood joinery – all of which will cater to the region’s business-to-business (B2B) market.
Dolphin Energy also signed a contract to accommodate hardware for its Emergency Pipeline Repair System (EPRS) at its new facility based in Kizad. The Dh55 million-facility will take shape on a 45,388 sq mc-plot that will accommodate all EPRS hardware which will be housed, maintained and kept in a state of readiness in the event it is required.
OPENING OF NEW FACILITIES
2016 also marked the opening of a number of new facilities at Kizad that sever a variety of strategic industrial sectors.
In December 2016, Al Dahra Holding opened the Gulf region’s largest and only rice factory of its kind at KIZAD with a capacity to produce up to 120,000 metric tonnes of rice per annum. Spanning a total area of 100,106 sq m, the facility handles the full production cycle of rice that includes milling, storage, packaging as well as distribution within the UAE and exporting to foreign markets via the adjacent Khalifa Port.
Al Masaood group along with its partner KSB AG of Germany – one of the world’s leading manufacturers of industrial pumps, valves, and related systems and services – opened their new facility in February 2016.
KSB’s new 12,141 sq m facility in Kizad is their largest in the GCC region and one of their biggest from over 160 industrial service facilities across the globe. Its high production capacity will cater to KSB’s regional customers, offering services related to pumps, valves, gearboxes, speed converters, compressors and electro motors.
In January 2016, Polysys Additive Technologies Middle East (PAT ME), Songwon Industrial Co’s joint venture, commenced the operations of its state-of-the-art manufacturing plant in Kizad. The facility is dedicated to manufacturing One Pack Systems (OPS) − multicomponent, tailor made blends of additives in a pelletised form and then packaged in a clean, dust free environment, ready for shipping. With an initial capacity of 7’000 MT per annum, the manufacturing facility was specifically designed to allow for future expansion to meet the increasing demand for OPS products in the Middle East region and beyond.
Some of the other prominent customers to have opened manufacturing facilities within the industrial zone in 2016 include Senaat – Talex, Emirates Investment Authority, Consolidated Contractors International Company, Oriental Fasteners, Technovaa Industries, and Al Seer Group.
National Food Product Company (NFPC), one of the largest food producers in the UAE, launched construction activities of its new 752,000-sq m production facility in Kizad in February, 2016. The facility, which will manufacture most of NFPC brands, and is expected to start operations in the first quarter of 2018.
In April 2016, Al Gharbia Pipe Company, a joint venture between Senaat and two of Japan’s leading companies in the steel sector; JFE Steel Corporation and Marubeni-Itochu Steel, started the construction of its new plant in Kizad.
To be built on a 200,000 sq m plot of land, the plant is expected to formally launch operations in 2018. Once fully operational, production capacity is set to reach 240,000 tonnes annually, of which around 40 per cent will be exported to neighbouring markets in the GCC and greater Middle East, as well as North and East Africa through Khalifa Port and the excellent road network that the UAE’s infrastructure provides.
Gulf Printing and Packaging Company, a subsidiary of Al Khat Packaging Co, one of the largest producers of printing and packaging materials in Kuwait, commenced in February 2016 the construction of its new facility. The Dh80 million-facility will be Al Khat’s first production plant outside Kuwait. The factory will further expand the company’s manufacturing capacity to meet the requirements of various supply contracts covering the region.
The increased business activities at Kizad has mandated streamlining licensing and approval procedures at government departments and licensing authorities as part of its priority to provide customers with value-added solutions that enhanced their experience. This will allow businesses operating within Kizad to save time and efforts while processing government transactions.
Towards this end, Abu Dhabi Ports partnered with Abu Dhabi Chamber to establish a representative office of the Chamber at the Business Centre of Kizad in Al Taweelah. The representative office will be dedicated to businesses operating within Khalifa Port and Kizad, with a view to establishing direct communication channels between the Chamber and customers.
Abu Dhabi Ports also implemented an automated system, aimed at simplifying and expediting investor submissions of documents related to at least 20 different processes including licensing, planning, engineering, construction, operation, decommissioning, immigration and customs. The system marks the first phase of a comprehensive automation drive at Kizad that will, in its second phase, offer online services for investors through its website.
Abu Dhabi Ports also signed an agreement with Enjazat Services to set up dedicated service desks which will provide investors within Kizad with end-to-end service related to licensing, residency permits, including labour visas, free zone employment visas, family visas, legal translation, legal consultancy, and additional third party specialised services for companies and investors.
LEASING AT LOGISTICS PARK
Location is key for business success and Kizad is strategically located to offer customers access to major regional and international markets. Being a fundamental aspect to the logistics, storage and distribution industries, Kizad’s strategic location has been leveraged with its world-class Logistics Park which provides tenants quick and efficient access to modern transport networks via road, sea, air, and rail linkages.
Kizad Logistics Park (KLP) is comprised of pre-built and well-designed modular warehouse units. These units are equipped with easy access loading docks for your trucks, raised docked floor levels and clear open space for the eaves. The design also includes the shell and core scheme for setting up a mezzanine office.
KLP has fully leased out its pre-built warehouses in Phase 1. In 2016, the company launched Phase 2 with 64 new units, across a total area of over 70,000 sq m, to meet growing demand in the market. Since the launch of KLP, Kizad has signed agreements with Spinneys, the UAE’s leading retailer, Juma Airlink, a supply chain and logistics solutions provider, All Prints Distributor & Publishing, and Hygienetech. Another highly anticipated project in the year ahead is the construction of 35 free zone warehouses, as part of the Khalifa Port, with a total area of approximately 17,000 sq m.
Comprising areas A and B that span 410 sq km, Kizad’s value proposition combines outstanding access to markets with over 4.5 billion consumers connected via excellent sea, road, air and future rail transport networks.
It offers a hybrid model of free-zone and non-free zone solutions complemented by dedicated investor support that simplifies the process of setting up businesses in Abu Dhabi.
The opening of the new Mohammed bin Rashid Road last November marked a major milestone in enabling Khalifa Port’s expansion and growth plans. Both manufacturers and exporters are gaining from reduced operational costs, significantly easing container traffic and reducing travelling time between the port and the rest of the country.
In August 2016, Kizad received the first container of Morgan Advanced Materials (Morgan), a world leader in advanced materials, underscoring the streamlined, interconnected nature of the supply chain leading to and from Kizad’s Free Zone.
Through an initial 30-year agreement, Morgan has committed to an initial investment of Dh50 million ($13.61 million) in their facility at Kizad’s Free Zone.
Kizad is also supported by the adjacent Khalifa Port, one of the world’s fastest-growing ports with a semi-automated container terminal that handles all of Abu Dhabi’s container traffic. With a current capacity of 2.5 million TEUs (20-foot equivalent units) and 12 million tonnes of general cargo, Khalifa Port plays a pivotal role in achieving economic diversification and enabling investors to maximise the potential of their businesses.
Abu Dhabi Ports has recently announced a major expansion plan at Khalifa Port that will integrate 1,000 m of quay wall and deepen its main channel and basin to 18 m, adding an area of 600,000 sq m for cargo handling. Furthermore, a concession agreement to operate the new terminal at Khalifa Port, signed with Chinese shipping company Cosco in September 2016, will increase overall annual capacity to 6 million TEUs once all phases are complete.